Notes to SEFA
Title: NOTE 2 - MORTGAGE PAYABLE - FEDERAL FUNDS:
Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal expenditure activity of Millsboro Housing for Progress, Inc. and Affiliates, under programs of the federal government for the year ended December 31, 2024.
The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Entity, it is not intended to and does not present the Entity's financial position, changes in net assets, or cash flows.
Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
De Minimis Rate Used: N
Rate Explanation: Management did not elect to use the 15% de minimis indirect cost rate as allowed under the Uniform Guidance.
USDA - RD: A long-term debt instrument was provided by RD pursuant to its Rural Housing Program under Section 521 of the National Housing Act of 1949 for Millsboro Village Apartments. The long-term debt instrument is secured by a mortgage against the real estate, an interest in personal property, and an assignment of income to be derived from the Project.
The mortgage balance presented above reflects the outstanding principal balance as of December 31, 2024. For purposes of the Schedule of Expenditures of Federal Awards (SEFA), the loan under the Section 515 Rural Rental Housing Program is reported at its balance at the beginning of the year, which totaled $1,115,997.
This treatment aligns with the Uniform Guidance, which requires federal loan programs with continuing compliance requirements to be reported at their balances as of the beginning of the year. Although the loan proceeds were originally expended in prior years in connection with the construction or rehabilitation of the property, the loan remains subject to these compliance requirements throughout its full term.
In addition, USDA - RD provided interest credit subsidies during the year that reduced required debt service payments by $35,805. These subsidies effectively lower the interest rate charged on the loan, in some cases to as low as 1%, and are also reported on the SEFA as federal expenditures.
Title: NOTE 3 - RENTAL ASSISTANCE - FEDERAL FUNDS:
Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal expenditure activity of Millsboro Housing for Progress, Inc. and Affiliates, under programs of the federal government for the year ended December 31, 2024.
The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Entity, it is not intended to and does not present the Entity's financial position, changes in net assets, or cash flows.
Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
De Minimis Rate Used: N
Rate Explanation: Management did not elect to use the 15% de minimis indirect cost rate as allowed under the Uniform Guidance.
Rental assistance is provided to eligible tenants under housing assistance payment contracts administered by HUD. These contracts require tenants to contribute a portion of the rent based on their income, and the difference between the tenant payment and the full contract rent is subsidized by HUD. In 2024, Millsboro Village Apartments earned a total of $530,252 under HUD’s Section 8 Project-Based Rental Assistance Program.